The table given below shows the total fixed and variable costs of a firm. Table 7.3
In Table 7.3, the average fixed cost of the first unit of output is ____ while the average fixed cost of producing 8 units of output is ____.

Question

The table given below shows the total fixed and variable costs of a firm. Table 7.3
 In Table 7.3, the average fixed cost of the first unit of output is ____ while the average fixed cost of producing 8 units of output is ____.

Quizplus · Accepted Answer

Average fixed cost (AFC) is calculated by dividing total fixed cost (TFC) by the quantity of output (q).

For the first unit of output: AFC = TFC/q = $40/1 = $40

For 8 units of output: AFC = TFC/q = $40/8 = $5

Therefore, the correct answer is B.

The Table Given Below Shows the Total Fixed and Variable